Loan amortization calculator
Enter the loan and see each payment split into principal and interest — and what the loan really costs by the end.
Result
The bank collects its interest on whatever balance is still outstanding, so the early payments are the most interest-heavy — the loan gets cheaper to carry as the balance falls.
Every bar is the same money out of your pocket — early on the orange (interest) takes the bigger bite, then the mix shifts to principal.
How is this calculated?
Using the tool
A level-payment loan hides its cost in plain sight: the payment never changes, but what the payment does changes every month. Enter the loan and see the honest split — how much of your money buys the thing, how much buys the borrowing, and what the loan really costs by the end.
The math
A level-payment loan charges interest each month on the balance you still owe: interest = balance × (rate ÷ 12). Whatever your fixed payment doesn't spend on interest goes to principal, which shrinks the balance — so next month's interest is a little smaller and the principal share a little bigger. The fixed payment itself comes from one formula, PMT = P·i ÷ (1 − (1+i)⁻ⁿ), sized so the balance lands exactly on zero at the last payment. That's why the split flips over the life of the loan, and why paying the same loan over more years lowers the payment but raises what you pay in total.
New to the math? Learn the concept: Business finance, made visual